Last week Chairman Bernanke testified that inflation generally appears contained, but that the Fed. remains vigilant.
This is good news, especially if you noticed Hormel's quarterly earnings call, Hormel expects higher grain costs:
"will continue to burden our turkey operation, and we are working hard to find ways to offset this extra expense, including through advances in pricing," said CEO Jeff Ettinger.
Corn costs driving up turkey costs, sounds a lot like the seed of inflation to me.
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2 comments:
So would you rather have $2.00/bu corn or $30/bar oil?
I tend to think it will be tough to get either.
The part of the equation that hasn't really changed is consumption. While the growth of oil consumption has slowed due to high prices, it continues to rise. Shifting demand from oil to corn doesn't solve anything in the long run. I am certainly not a follower of Malthus, but there is a limit to what the world can supply.
As long as people can afford to consume, they will, which is why I think both oil and corn prices will continue to rise for the forseeable future until prices hit a level that forces people to look for ways to reduced consumption (demand)
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